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Global financial markets surged and crude oil prices tumbled following the announcement of a two-week ceasefire involving Iran.

However, economists and industry experts warn that any relief for household budgets may be slow to materialize, as concerns grow that lasting disruptions have already taken hold.

Over the past month, shipments of oil, liquefied natural gas and fertiliser have been largely unable to pass through the Strait of Hormuz, while key infrastructure across the Gulf has suffered damage severe enough to halt production.

Even if the ceasefire endures and a broader peace agreement is secured, analysts say restoring output and stabilizing supply chains could take several months.
Little immediate relief for fuel costs

Although crude oil prices have dropped sharply, they remain above levels seen before the conflict, meaning motorists are unlikely to see a rapid decline in pump prices, according to the RAC.

Simon Williams, the organization’s head of policy, said uncertainty remains high, and the most realistic short-term outcome is that prices stop rising rather than fall significantly.

He noted that smaller, independent fuel retailers — which purchase fuel at current market rates instead of fixed contracts — may respond more quickly to falling prices.

"Much will depend on the stability of the ceasefire, whether oil shipments can move freely through the Strait of Hormuz, and the longer-term impact on oil production across the Gulf," he says.

Williams added that wholesale costs would only decline meaningfully if lower oil prices are sustained over several weeks.

Rachel Winter, from wealth management firm Killik & Co, said forecasting the timing of price reductions remains difficult.

"I would expect it to take at least a few weeks, if not a few months," she told BBC Radio 4's Today Programme.

Jet fuel prices, meanwhile, are currently about twice as high as they were before the conflict began.

Willie Walsh, director general of the International Air Transport Association (IATA), said that even if shipping routes reopen immediately, supply levels will take months to normalize.

He warned that passengers should anticipate higher ticket prices in the interim.

Some airlines have already raised fares or reduced services.

Winter also pointed out that even if fuel shipments resume, refining capacity remains constrained due to damage at processing facilities.

Alan Gelder, senior vice-president for refining, chemicals and oil markets at Wood Mackenzie, said recovery depends on the full supply chain functioning again, from shipping routes to refinery operations — a process he expects to take "weeks, not days".
Food prices still under pressure

Roughly one-third of global fertiliser shipments typically transit through the Strait of Hormuz, and prices have surged in recent weeks.

Transporting food has already become more costly, while farmers face higher diesel expenses for machinery. Growers relying on heated greenhouses are also bracing for increased energy bills when the price cap is revised in July.

The Food and Drink Federation, representing thousands of UK producers, said the ceasefire does little to resolve ongoing uncertainty.

Dr Liliana Danila, the group’s chief economist, said rebuilding supply chains and energy infrastructure in the Gulf could take between six months and a year.

"This means manufacturers will continue to feel the impact of supply chain disruptions for oil, gas, fertiliser, packaging materials and essential cleaning chemicals, keeping costs under strain for months to come."

Even if fighting ends within the next fortnight, the federation expects UK food inflation to reach at least 9% by year-end.
Gas prices expected to remain elevated

So far, households covered by Ofgem’s energy price cap have been insulated from spikes in wholesale gas prices.

The cap is due for revision in July, with more than half of the calculation period already complete. Analysts have been anticipating a significant increase.

While the government has pledged financial support based on income levels, assistance may not arrive until autumn.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said the ceasefire reduces immediate strain on gas markets but "does not wipe the slate clean".

If shipping routes reopen and remain secure, some price relief could be reflected in the July cap, he said. However, he cautioned: "Unless prices fall well below where they were before the conflict, the wholesale price rises seen through March and early April will still feed through to bills."

Lars Jensen of Vespucci Maritime said shipping firms will require stronger guarantees before resuming normal operations, expressing doubt that a short ceasefire will restore confidence.

"We should see an increase in exiting vessels," he told Today.

"We will likely also begin to see a trickle of vessels going into the Gulf, but those two will not be of the same magnitude."

Lowrey added that damage to gas infrastructure in Qatar could take years to repair, prolonging supply constraints.

"As a result, even with a ceasefire, wholesale gas prices are likely to stay elevated for some time, limiting how far the July price cap can fall."